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EXHIBIT 10.7
WARRANT PURCHASE AGREEMENT
By and Among
VALUEVISION INTERNATIONAL, INC.,
XXXX.XXX, INC.
AND
SNAP! LLC
Dated as of September 13, 1999
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[EXECUTION COPY]
WARRANT PURCHASE AGREEMENT
WARRANT PURCHASE AGREEMENT, dated as of September 13, 1999
(this "Agreement"), by and among ValueVision International, Inc., a Minnesota
corporation ("ValueVision"), Xxxx.xxx, Inc., a Delaware corporation ("Xoom"),
and Snap! LLC, a Delaware limited liability company ("Snap"). Capitalized terms
not otherwise defined where used shall have the meanings ascribed thereto in
Article I.
WHEREAS, Xoom has agreed to purchase from ValueVision, and
ValueVision has agreed to sell to Xoom, subject to the terms and conditions of
this Agreement, a warrant to purchase shares of common stock, $.01 par value, of
ValueVision ("ValueVision Common Stock");
WHEREAS, ValueVision has agreed to purchase from Xoom, and
Xoom has agreed to sell to ValueVision, subject to the terms and conditions of
this Agreement, a warrant to purchase shares of common stock, $.0001 par value,
of Xoom ("Xoom Common Stock"); and
WHEREAS, Xoom and Snap have entered into a series of
agreements dated as of May 9, 1999, June 11, 1999 and July 8, 1999 concerning
the reorganization of Xoom and Snap (the "Reorganization");
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained and intending to be
legally bound hereby, the parties hereby agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with, such Person. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
"Ancillary Documents" shall mean the Interactive Agreement,
the Trademark License Agreement, the ValueVision Warrant, the Xoom Warrant, the
ValueVision Registration Rights Agreement and the Xoom Registration Rights
Agreement.
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"Closing" shall have the meanings set forth in Section 2.2(a).
"Contractual Obligation" shall mean, as to any Person, any
provision of any note, bond or security issued by such Person, or of any
mortgage, indenture, deed of trust, lease, license, franchise, contract,
agreement, instrument or undertaking to which such Person is a party or by which
it or any of its property is subject.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Entity" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any self-regulating organization, securities exchange or
securities trading system.
"Interactive Agreement" shall mean the Interactive Promotion
Agreement dated as of the date hereof between ValueVision and Snap pursuant to
which ValueVision shall operate an online home shopping service at
xxx.xxxxxx.xxx.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or security agreement of any
kind or nature whatsoever (including, without limitation, any conditional sale
or other title retention agreement or any financing lease having substantially
the same effect as any of the foregoing).
"Material Adverse Effect" shall mean a material adverse effect
on (i) the assets, business condition, results of operations or financial
condition of a party and its Subsidiaries taken as a whole or (ii) with respect
to any party, the ability of such party to timely perform its obligations under
this Agreement or any Ancillary Document to which it is a party.
"NBC" shall mean National Broadcasting Company, Inc., a
Delaware corporation.
"Person" shall mean an individual, corporation, unincorporated
association, partnership, group (as defined in Section 13(d)(3) of the Exchange
Act), trust, joint stock company, joint venture, business trust or
unincorporated organization, limited liability company, any Governmental Entity
or any other entity of whatever nature.
"Requirement of Law" shall mean, as to any Person, the
certificate of incorporation and by-laws or other organizational documents of
such Person, and any law, statute, order, treaty, rule or regulation, or
judgment, decree, determination or order of any arbitrator, court or other
Governmental Entity, applicable to or binding upon such Person or any of its
property.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
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"Subsidiary" shall mean, as to any Person, a corporation,
partnership, limited liability company, joint venture or other entity of which
shares of stock or other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
"Xoom" shall have the meaning set forth in the preamble
hereto.
"Xoom Registration Rights Agreement" shall mean the
registration rights agreement to be executed by Xoom and ValueVision with
respect to the common stock of Xoom, which shall be substantially in the form
attached as Exhibit A hereto.
"Xoom SEC Documents" shall have the meaning set forth in
Section 3.2(e).
"Xoom Warrant" shall mean the warrant to purchase shares of
common stock, par value $.0001, of Xoom, which shall be substantially in the
form of Exhibit B hereto.
"ValueVision" shall have the meaning set forth in the preamble
hereto.
"ValueVision Registration Rights Agreement" shall mean the
registration rights agreement to be executed by Xoom and ValueVision with
respect to the common stock of ValueVision, which shall be substantially in the
form attached as Exhibit C hereto.
"ValueVision SEC Documents" shall have the meaning set forth
in Section 3.1(e).
"ValueVision Warrant" shall mean the warrant to purchase
shares of common stock, par value $.01, of ValueVision, which shall be
substantially in the form of Exhibit D hereto.
ARTICLE II
Sale and Purchase of the Securities
Section 2.1. Agreement to Sell and Purchase. (a) Upon and
subject to the terms and conditions set forth in this Agreement, ValueVision
agrees to issue, sell and deliver to Xoom, and Xoom agrees to purchase from
ValueVision, the ValueVision Warrant.
(b) Upon and subject to the terms and conditions of this
Agreement, Xoom agrees to issue, sell and deliver to ValueVision, and
ValueVision agrees to purchase from Xoom, the Xoom Warrant.
Section 2.2. Closing. (a) The purchase and sale of the
ValueVision Warrant and the Xoom Warrant pursuant to Section 2.1 (the "Closing")
shall occur upon the execution and delivery of this Agreement.
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(b) At the Closing: ValueVision shall deliver to Xoom the
ValueVision Warrant and Xoom shall deliver to ValueVision the Xoom Warrant, and
each party shall execute and deliver to the other parties each of the Ancillary
Agreements to which it is a party. The purchase price for the ValueVision
Warrant shall be the Xoom Warrant, and the purchase price for the Xoom Warrant
shall be the ValueVision Warrant.
Section 2.3 Standstill and Transfer Restrictions. (a)
ValueVision agrees that the ValueVision Warrant and any shares of ValueVision
Common Stock acquired thereunder, whether acquired by Xoom, Snap, NBC, General
Electric Company or any of their respective Affiliates, shall not be subject to
the restrictions contained in Article IV of the Shareholder Agreement, dated as
of April 15, 1999 among ValueVision, NBC and GE Capital Equity Investments, Inc.
(b) Xoom agrees that the Xoom Warrant and any shares of Xoom
Common Stock acquired thereunder, whether acquired by ValueVision, NBC, General
Electric Company or any of their respective Affiliates, shall not be subject to
the restrictions contained in Article II and Section 3.1 of the Governance and
Investors Rights Agreement between NBC and NBC Internet, Inc. to be entered into
pursuant to the consummation of the Agreement and Plan of Contribution,
Investment and Merger dated as of May 9, 1999, as amended and restated on June
11, 1999 and July 8, 1999, among NBC, Xoom, GE Investments Subsidiary, Inc.,
Neon Media Corporation and Xenon 2, Inc.
ARTICLE III
Representations and Warranties
Section 3.1. Representations and Warranties of ValueVision.
ValueVision represents and warrants to Xoom and Snap as of the date hereof as
follows:
(a) Organization and Good Standing of ValueVision. ValueVision
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota and has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its
businesses as they are now being conducted. ValueVision is duly licensed or
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which its ownership
or leasing of properties, or the conduct of its businesses requires such
licensing or qualification and good standing, except where the failure to be so
licensed or qualified or in good standing in any such jurisdiction would not
have a Material Adverse Effect on ValueVision.
(b) Authorization; No Conflicts. ValueVision has full
corporate power and authority to enter into this Agreement and the Ancillary
Documents and to perform its obligations hereunder and thereunder. The
execution, delivery and performance by ValueVision of this Agreement and each
Ancillary Document and the consummation of ValueVision's obligations hereunder
and thereunder have been duly authorized by all necessary corporate action. This
Agreement has been, and on or prior to the Closing Date each Ancillary Document
will be, duly and validly executed and delivered by ValueVision. This Agreement
constitutes,
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and upon its execution and delivery on or prior to the Closing Date, each
Ancillary Document will constitute, a valid and legally binding obligation of
ValueVision enforceable against ValueVision in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors generally and by
general equitable principles. Except for the consent of NBC and GE Capital
Equity Investments, Inc. (which has been obtained), the execution, delivery and
performance of this Agreement and the Ancillary Documents by ValueVision, the
consummation of the transactions by ValueVision contemplated hereby and thereby
and the compliance by ValueVision with the provisions hereof and thereof will
not conflict with, violate or result in a breach of any provision of, require a
consent, approval or notice under, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any Lien upon any of the properties or assets of ValueVision or
Material Subsidiaries under, (i) the articles of incorporation, by-laws or other
governing instrument of ValueVision, (ii) any Contractual Obligation of
ValueVision or (iii) any Requirement of Law applicable to ValueVision, except,
in the case of clauses (ii) and (iii) above, such conflicts, violations,
breaches, consents, approvals, notices, defaults, terminations, accelerations or
Liens which would not have a Material Adverse Effect on ValueVision.
(c) Consents. No consent, approval, order or authorization of,
registration, declaration or filing with, or notice to, any Governmental Entity
is required on the part of ValueVision or any of its Subsidiaries in connection
with the execution and delivery by ValueVision of this Agreement and the
Ancillary Documents, the consummation by ValueVision of the transactions
contemplated hereby and thereby or the performance by ValueVision of its
obligations hereunder and thereunder, except for (i) such filings as may be
required under the blue sky laws of the various states, (ii) such consents,
approvals, orders, authorizations, registrations, declarations, filings or
notices of which the failure to make or obtain would not have a Material Adverse
Effect on ValueVision.
(d) Capitalization. (i) As of September 2, 1999, the
authorized capital stock of ValueVision consisted of 100,000,000 shares of
undesignated capital stock. As of such date, 37,017,684 shares of ValueVision
Common Stock were issued and outstanding, no shares of ValueVision Common Stock
were held in treasury, and no shares of Common Stock werer reserved for issuance
upon exercise of outstanding stock options except for 6,515,385 shares reserved
in respect of options. As of such date, 5,339,500 shares of ValueVision
preferred stock werer designated Series A Redeemable Convertible Preferred Stock
(the "Preferred Stock"), and 5,339,500 shares were issued and outstanding. All
of the issued and outstanding shares of ValueVision's capital stock have been
duly and validly authorized and issued and are fully paid and nonassessable and
not subject to preemptive rights.
(ii) Upon delivery of the ValueVision Warrant on the Closing
Date as provided herein, the ValueVision Warrant will be duly and
validly authorized and issued, fully paid and nonassessable and not
subject to preemptive rights, and Xoom will acquire good title thereto,
free and clear of all Liens (other than any Lien created by Xoom). The
shares of ValueVision Common Stock issuable upon exercise of the
ValueVision Warrant have been reserved for issuance and, when issued
upon exercise of the ValueVision Warrant, will be duly and validly
authorized and issued, fully paid and nonassessable and not subject to
preemptive rights, and the owner of such shares will
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acquire good title thereto, free and clear of all Liens (other than any
Lien created by such owner).
(iii) The consummation of the transactions contemplated by
this Agreement will not trigger the anti-dilution provisions or other
price adjustment mechanisms of any outstanding subscriptions, options,
warrants, calls, contracts, preemptive rights, demands, commitments,
conversion rights or other agreements or arrangements of any character
or nature whatsoever under which ValueVision is or may be obligated to
issue or acquire its capital stock.
(e) SEC Filings, Financial Information, Liabilities.
ValueVision has filed and made available to Xoom and Snap a true and complete
copy of each report, schedule, registration statement and definitive proxy
statement required to be filed with the SEC since January 1, 1998 (the
"ValueVision SEC Documents"). As of their respective dates, the ValueVision SEC
Documents, after giving effect to any amendments and supplements thereto filed
prior to the date hereof, complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
applicable to such ValueVision SEC Documents. None of the ValueVision SEC
Documents when filed, after giving effect to any amendments and supplements
thereto filed prior to the date hereof, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of ValueVision included in the ValueVision SEC Documents comply as to
form in all material respect with the applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP during the period involved (except as may
be indicated in the notes thereto or, in the case of the unaudited statements,
as permitted by Form 10-Q of the SEC, or for normal year-end adjustments) and
fairly present in all material respects the consolidated financial position of
ValueVision and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. Except as set forth in the ValueVision SEC Documents (including any item
accounted for in the financial statements contained in the ValueVision SEC
Documents or set forth in the notes thereto) as of July 31, 1999, neither
ValueVision nor any of its Subsidiaries had, and since such date neither
ValueVision nor any of its Subsidiaries has incurred, any claims, liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
which, individually or in the aggregate, would have a Material Adverse Effect on
ValueVision (other than claims, liabilities or obligations contemplated by this
Agreement or the Ancillary Documents or expressly permitted to be incurred
pursuant to this Agreement or the Ancillary Documents). In addition, since July
31, 1999, there has not been any declaration, setting aside or payment of a
dividend or other distribution with respect to shares of capital stock of
ValueVision or any material change in accounting methods or practices by
ValueVision or any of its Subsidiaries.
(f) Absence of Certain Changes. Since July 31, 1999, the
business of ValueVision has been operated in the usual and ordinary course
consistent with past practice (except as disclosed in the ValueVision SEC
Documents filed prior to the date hereof and the negotiation, execution,
delivery and performance of this Agreement and the Ancillary Documents and the
transactions contemplated hereby and thereby) and there has been no event,
condition or change that has had a Material Adverse Effect on ValueVision.
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(g) Securities Act. (i) ValueVision (A) is acquiring the Xoom
Warrant solely for the purpose of investment and not with a view to, or for
resale in connection with, any distribution thereof in violation of the
Securities Act; (B) has had the opportunity to ask questions of the officers and
directors of, and has had access to information concerning, Xoom and the Xoom
Warrant; (C) is an "accredited investor" as defined in Rule 501(a) under the
Securities Act; (D) has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the investment in Xoom and the Xoom Warrant; (E) has so evaluated the
merits and risks of such investment; (F) is able to bear the economic risk of
such investment; and (G) is able to afford a complete loss of such investment.
(ii) Subject to and based in part upon the truth and
accuracy of the representations and warranties of Xoom in Section
3.2(g)(i) hereof, the offering, sale and purchase of the ValueVision
Warrant contemplated hereby are exempt from registration under the
Securities Act and are exempt from registration under any applicable
state securities or "blue sky" laws.
(h) Brokers and Finders. ValueVision has not utilized any
broker, finder, placement agent or financial advisor or incurred any liability
for any fees or commissions in connection with any of the transactions
contemplated hereby or by the Ancillary Documents.
Section 3.2. Representations and Warranties of Xoom. Xoom
represents and warrants to ValueVision as of the date hereof as follows:
(a) Organization and Good Standing of Xoom. Xoom is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its businesses as they are
now being conducted. Xoom is duly licensed or qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which its ownership or leasing of properties, or the
conduct of its businesses requires such licensing or qualification and good
standing, except where the failure to be so licensed or qualified or in good
standing in any such jurisdiction would not have a Material Adverse Effect on
Xoom.
(b) Authorization; No Conflicts. Xoom has full corporate power
and authority to enter into this Agreement and the Ancillary Documents and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance by Xoom of this Agreement and each Ancillary Document and the
consummation of Xoom's obligations hereunder and thereunder have been duly
authorized by all necessary corporate action. This Agreement has been, and on or
prior to the Closing Date each Ancillary Document will be, duly and validly
executed and delivered by Xoom. This Agreement constitutes, and upon its
execution and delivery on or prior to the Closing Date, each Ancillary Document
will constitute, a valid and legally binding obligation of Xoom enforceable
against Xoom in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors generally and by general equitable principles.
Except for the consent of NBC (which has been obtained), the execution, delivery
and performance of this Agreement and the Ancillary Documents by Xoom, the
consummation of the transactions by Xoom contemplated hereby and thereby and the
compliance by Xoom with
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the provisions hereof and thereof will not conflict with, violate or result in a
breach of any provision of, require a consent, approval or notice under, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of or accelerate
the performance required by, or result in a right of termination or acceleration
under, or result in the creation of any Lien upon any of the properties or
assets of Xoom or its Material Subsidiaries under, (i) the certificate of
incorporation, by-laws or other governing instrument of Xoom, (ii) any
Contractual Obligation of Xoom or (iii) any Requirement of Law applicable to
Xoom, except, in the case of clauses (ii) and (iii) above, such conflicts,
violations, breaches, consents, approvals, notices, defaults, terminations,
accelerations or Liens which would not have a Material Adverse Effect on Xoom.
(c) Consents. No consent, approval, order or authorization of,
registration, declaration or filing with, or notice to, any Governmental Entity
is required on the part of Xoom or any of its Subsidiaries in connection with
the execution and delivery by Xoom of this Agreement and the Ancillary
Documents, the consummation by Xoom of the transactions contemplated hereby and
thereby or the performance by Xoom of its obligations hereunder and thereunder,
except for (i) such filings as may be required under the blue sky laws of the
various states, (ii) such consents, approvals, orders, authorizations,
registrations, declarations, filings or notices of which the failure to make or
obtain would not have a Material Adverse Effect on Xoom.
(d) Capitalization. (i) As of the date hereof, the authorized
capital stock of Xoom consists of 80,000,000 shares of Xoom Common Stock and
5,000,000 shares of Xoom Preferred Stock. As of the date hereof, 19,485,418
shares of Xoom Common Stock are issued and outstanding, no shares of Common
Stock are held in treasury, and 5,724,703 shares of Xoom Common Stock are
reserved for issuance upon exercise of outstanding stock options and pursuant to
Xoom's 1998 Stock Incentive Plan. As of the date hereof, no shares of Xoom
Preferred Stock are designated, and no shares of Xoom Preferred Stock are issued
and outstanding. All of the issued and outstanding shares of Xoom's capital
stock have been duly and validly authorized and issued and are fully paid and
nonassessable and not subject to preemptive rights.
(ii) Upon delivery of the Xoom Warrant on the Closing
Date as provided herein, the Xoom Warrant will be duly and validly
authorized and issued, fully paid and nonassessable and not subject to
preemptive rights, and ValueVision will acquire good title thereto,
free and clear of all Liens (other than any Lien created by
ValueVision). The shares of Common Stock issuable upon exercise of the
Xoom Warrant have been reserved for issuance and, when issued upon
exercise of the Xoom Warrant, will be duly and validly authorized and
issued, fully paid and nonassessable and not subject to preemptive
rights, and the owner of such shares will acquire good title thereto,
free and clear of all Liens (other than any Lien created by such
owner).
(iii) The consummation of the transactions contemplated by
this Agreement will not trigger the anti-dilution provisions or other
price adjustment mechanisms of any outstanding subscriptions, options,
warrants, calls, contracts, preemptive rights, demands, commitments,
conversion rights or other agreements or arrangements of any character
or nature whatsoever under which Xoom is or may be obligated to issue
or acquire its capital stock.
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(e) SEC Filings, Financial Information, Liabilities. Xoom has
filed and made available to ValueVision a true and complete copy of each report,
schedule, registration statement and definitive proxy statement required to be
filed with the SEC since December 9, 1998 and the registration statement on Form
S-4 filed by NBC Internet, Inc. (including amendments thereto) (collectively,
the "Xoom SEC Documents"). As of their respective dates, the Xoom SEC Documents,
after giving effect to any amendments and supplements thereto filed prior to the
date hereof, complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, applicable to such Xoom
SEC Documents. None of the Xoom SEC Documents when filed, after giving effect to
any amendments and supplements thereto filed prior to the date hereof, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Xoom included in the Xoom SEC Documents
comply as to form in all material respect with the applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP during the period
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC, or for normal
year-end adjustments) and fairly present in all material respects the
consolidated financial position of Xoom and its consolidated Subsidiaries as at
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended. Except as set forth in the Xoom SEC Documents
(including any item accounted for in the financial statements contained in the
Xoom SEC Documents or set forth in the notes thereto) as of June 30, 1999,
neither Xoom nor any of its Subsidiaries had, and since such date neither Xoom
nor any of its Subsidiaries has incurred, any claims, liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise) which,
individually or in the aggregate, would have a Material Adverse Effect on Xoom
(other than claims, liabilities or obligations contemplated by this Agreement or
the Ancillary Documents or expressly permitted to be incurred pursuant to this
Agreement or the Ancillary Documents). In addition, since June 30, 1999, there
has not been any declaration, setting aside or payment of a dividend or other
distribution with respect to shares of capital stock of Xoom or any material
change in accounting methods or practices by Xoom or any of its Subsidiaries.
(f) Absence of Certain Changes. Since June 30, 1999, the
business of Xoom has been operated in the usual and ordinary course consistent
with past practice (except as disclosed in the Xoom SEC Documents filed prior to
the date hereof and the negotiation, execution, delivery and performance of this
Agreement and the Ancillary Documents and the transactions contemplated hereby
and thereby) and there has been no event, condition or change that has had a
Material Adverse Effect on Xoom.
(g) Securities Act. (i) Xoom (A) is acquiring the ValueVision
Warrant solely for the purpose of investment and not with a view to, or for
resale in connection with, any distribution thereof in violation of the
Securities Act; (B) has had the opportunity to ask questions of the officers and
directors of, and has had access to information concerning, ValueVision and the
ValueVision Warrant; (C) is an "accredited investor" as defined in Rule 501(a)
under the Securities Act; (D) has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits
and risks of the investment in ValueVision and the ValueVision Warrant; (E) has
so evaluated the merits and
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risks of such investment; (F) is able to bear the economic risk of such
investment; and (G) is able to afford a complete loss of such investment.
(ii) Subject to and based in part upon the truth and
accuracy of the representations and warranties of ValueVision in
Section 3.1(g)(i) hereof, the offering, sale and purchase of the Xoom
Warrant contemplated hereby are exempt from registration under the
Securities Act and are exempt from registration under any applicable
state securities or "blue sky" laws.
(h) Brokers and Finders. Xoom has not utilized any broker,
finder, placement agent or financial advisor or incurred any liability for any
fees or commissions in connection with any of the transactions contemplated
hereby or by the Ancillary Documents.
Section 3.3. Representations and Warranties of Snap. Snap
represents and warrants to ValueVision as of the date hereof as follows:
(a) Organization and Good Standing of Snap. Snap is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its
businesses as they are now being conducted. Snap is duly licensed or qualified
as a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which its ownership or leasing of
properties, or the conduct of its businesses requires such licensing or
qualification and good standing, except where the failure to be so licensed or
qualified or in good standing in any such jurisdiction would not have a Material
Adverse Effect on Snap.
(b) Authorization; No Conflicts. Snap has full corporate power
and authority to enter into this Agreement and the Ancillary Documents and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance by Snap of this Agreement and each Ancillary Document and the
consummation of Snap's obligations hereunder and thereunder have been duly
authorized by all necessary corporate action. This Agreement has been, and on or
prior to the Closing Date each Ancillary Document will be, duly and validly
executed and delivered by Snap. This Agreement constitutes, and upon its
execution and delivery on or prior to the Closing Date, each Ancillary Document
will constitute, a valid and legally binding obligation of Snap enforceable
against Snap in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors generally and by general equitable principles.
Except for the consent of NBC (which has been obtained), the execution, delivery
and performance of this Agreement and the Ancillary Documents by Snap, the
consummation of the transactions by Snap contemplated hereby and thereby and the
compliance by Snap with the provisions hereof and thereof will not conflict
with, violate or result in a breach of any provision of, require a consent,
approval or notice under, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
Lien upon any of the properties or assets of Snap under (i) the limited
liability company agreement, the operating agreement, by-laws or other governing
instrument of Snap, (ii) any Contractual Obligation of Snap or (iii) any
Requirement of Law applicable to Snap, except, in the case of clauses (ii) and
(iii) above, such conflicts, violations,
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breaches, consents, approvals, notices, defaults, terminations, accelerations or
Liens which would not have a Material Adverse Effect on Snap.
(c) Consents. No consent, approval, order or authorization of,
registration, declaration or filing with, or notice to, any Governmental Entity
is required on the part of Snap or any of its Subsidiaries in connection with
the execution and delivery by Snap of this Agreement and the Ancillary
Documents, the consummation by Snap of the transactions contemplated hereby and
thereby or the performance by Snap of its obligations hereunder and thereunder,
except for such consents, approvals, orders, authorizations, registrations,
declarations, filings or notices of which the failure to make or obtain would
not have a Material Adverse Effect on Snap.
(d) Brokers and Finders. Snap has not utilized any broker,
finder, placement agent or financial advisor or incurred any liability for any
fees or commissions in connection with any of the transactions contemplated
hereby or by the Ancillary Documents.
ARTICLE IV
Other Agreements
Section 4.1. Public Statements. Before any party or any
Affiliate of such party shall release any information concerning this Agreement
or the Ancillary Documents or the matters contemplated hereby or thereby which
is intended for or may result in public dissemination thereof, such party shall
cooperate with the other parties and NBC, shall furnish drafts of all documents
or proposed oral statements to the other parties and NBC, provide the other
parties and NBC the opportunity to review and comment upon any such documents or
statements and shall not release or permit release of any such information
without the consent of the other parties and NBC, except (following compliance
with this Section 4.1) to the extent required by applicable law or the rules of
any securities exchange or automated quotation system on which its securities or
those of its Affiliate are traded.
Section 4.2. Reservation of Shares. (a) ValueVision agrees to
keep reserved for issuance at all times prior to the exercise of the ValueVision
Warrant the aggregate number of shares of ValueVision Common Stock issuable upon
exercise of the ValueVision Warrant.
(b) Xoom agrees to keep reserved for issuance at all times
prior to the exercise of the Xoom Warrant the aggregate number of shares of Xoom
Common Stock issuable upon exercise of the Xoom Warrant.
Section 4.3. Further Assurances. Each party shall execute and
deliver such additional instruments and other documents and shall take such
further actions as may be necessary or appropriate to effectuate, carry out and
comply with all of the terms of this Agreement and the transactions contemplated
hereby, including without limitation making application as soon as practicable
for all consents and approvals required in connection with the transactions
contemplated hereby and diligently pursuing the receipt of such consents and
approvals in good faith.
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ARTICLE V
Miscellaneous
Section 5.1. Survival of Representations and Warranties. All
representations and warranties made herein or in any certificates delivered in
connection with the Closing shall survive for a period of eighteen months after
the Closing.
Section 5.2. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally, by telecopier or sent by overnight courier as follows:
(a) If to Xoom, to:
Xxxx.xxx, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
with copies to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx Xxxx, Esq.
Telecopier: 000-000-0000
(b) If to Snap, to:
SNAP! LLC
Xxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: 000-000-0000
with copies to:
National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President, Corporate Law
Group
Fax: (000) 000-0000
(c) If to ValueVision, to:
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ValueVision International, Inc.
0000 Xxxxx Xxx Xxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Fax: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
or to such other address or addresses as shall be designated in writing. All
notices shall be effective when received.
Section 5.3. Entire Agreement; Amendment. This Agreement, the
Ancillary Documents and the documents described herein and therein or attached
or delivered pursuant hereto or thereto set forth the entire agreement between
the parties hereto with respect to the transactions contemplated by this
Agreement. Any provision of this Agreement may be amended or modified in whole
or in part at any time by an agreement in writing between the parties hereto
executed in the same manner as this Agreement. No failure on the part of any
party to exercise, and no delay in exercising, any right shall operate as a
waiver thereof nor shall any single or partial exercise by any party of any
right preclude any other or future exercise thereof or the exercise of any other
right.
Section 5.4. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same document.
SECTION 5.5. GOVERNING LAW; JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED
WITHIN SUCH STATE, AND EACH PARTY HEREBY SUBMITS TO THE JURISDICTION OF ANY
STATE OR U.S. FEDERAL COURT SITTING WITHIN THE COUNTY OF NEW YORK, NEW YORK. THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT.
Section 5.6. Public Announcements. Each of ValueVision, Xoom
and Snap agrees to hold in strict confidence and not to disclose to others the
status of any discussions or relations among the parties with respect to the
subject matter of this Agreement or the Ancillary Documents until such time as
the parties mutually agree to publicly disclose such information or are legally
obligated to disclose such information or are obligated by applicable Nasdaq
rules to disclose such information.
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Section 5.7. Fees and Expenses. Each party shall bear its own
costs and expenses incurred in connection with this Agreement and the Ancillary
Documents and the transactions contemplated hereby, including the fees and
expenses of their respective accountants and counsel.
Section 5.8. Successors and Assigns; Third Party
Beneficiaries. Subject to applicable law and the following sentence, either
party may assign its rights and obligations under this Agreement in whole or in
part only to any Affiliate of such party, but no such assignment shall relieve
the assigning party of its obligations hereunder. No party shall assign any
rights or obligations under this Agreement to any Affiliate if such Affiliate
does not expressly assume pursuant to a document in form and substance
reasonably satisfactory to the other party all of the obligations of the
assigning party hereunder.
Section 5.9. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in addition to any other remedy to which they are entitled at law or in equity.
Section 5.10. Headings and Captions. The section headings and
captions contained in this Agreement are for reference purposes only, are not
part of this Agreement and shall not affect the meaning or interpretation of
this Agreement.
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IN WITNESS WHEREOF, this Warrant Purchase Agreement has been
executed by the parties hereto or by their respective duly authorized
representatives, all as of the date first above written.
VALUEVISION INTERNATIONAL, INC.
By:/s/ Xxxx XxXxxxxxx
----------------------------------
Name: Xxxx XxXxxxxxx
Title: Chief Executive Officer
XXXX.XXX, INC.
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Chairman
SNAP! LLC
By:/s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Operating Officer
[WARRANT PURCHASE AGREEMENT]
